Concord Isn’t Upping Its Hipgnosis Offer; Says $1.25-Per-Share Bid Is ‘Final and Will Not Be Increased’

Hipgnosis Songs Fund slashes valuation
  • Save

Hipgnosis Songs Fund slashes valuation
  • Save
Photo Credit: Hipgnosis Songs Fund

Apollo-backed Concord says it will not be increasing its Hipgnosis bid higher than $1.25 per share, a statement that gives Blackstone the higher offer and a path towards acquisition.

Concord will not be upping its offer for Hipgnosis Songs Fund (HSF), according a statement issued to Digital Music News late Wednesday (May 8th). In an emerging bidding war involving Blackstone, Concord had recently upped its offer to $1.25 per share, with Blackstone quickly beating the per-share price. Concord’s $1.25-per-share price, however, is’ final and will not be increased,’ according to the company and its operative acquisition entity, Concord Bidco.

“Further to the announcements made by Concord Bidco on 18 April 2024 and 24 April 2024 (the “Announcements”) setting out the terms of its all cash offer for the entire issued, and to be issued, share capital of Hipgnosis, Concord Bidco confirms that its offer of $1.25 per Hipgnosis Share is final and will not be increased,” the statement reads.

Late last month, after Concord put up an improved offer of $1.51 billion for Hipgnosis Songs Fund – and began purchasing shares from investors – Blackstone shot back with a $1.57 billion bid.

Blackstone, which is the majority owner of Hipgnosis Song Management, and HSF formally announced the higher bid on April 28th. Made via Blackstone’s newly formed “Lyra Bidco,” the proposal would pay the publicly traded songs fund’s investors $1.30 per share and was recommended by Hipgnosis Songs Fund to its shareholders.

Blackstone would also assume HSF’s sizable debt facility as part of their offer.

“The Board is pleased to unanimously recommend this US$1.6 billion Offer for Hipgnosis from Blackstone,” HSF chair Robert Naylor said in a statement late last month. “Since we started our strategic review, we have been clearly focused on looking at all the options to deliver shareholder value. We are delighted that, following competitive interests in acquiring Hipgnosis, our investors now have a chance to immediately realise their holding at an increased premium.”

Leading up to Concord’s latest announcement, multiple Hipgnosis shareholders have started to divest their shares.

That strongly suggested that the bidding war was coming to a close, though a purchase isn’t a clear next step. As part of a complex ownership arrangement, Hipgnosis Songs Management, or HSM, Hipgnosis Songs Fund’s investment advisor, appears resolutely ready to protect its position amidst the bidding war.

A key issue is a “call option” in the investment advisory agreement between HSM and HSF. This option would allow HSM to acquire HSF’s assets in specific scenarios, potentially hindering a sale to a third party.

As of very early Thursday, May 9th, HSF had not issued a statement on Concord’s decision to stay put.

More as this develops.